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GSET has grown exponentially in recent years .
The number of sales traders , for example , has increased 250 % since 2014 amid a huge rethink as to how each team can add value to the clients they service .
GSET has created new and dedicated divisions for areas such as algo consulting , market structure , product , acquisition , and marketing . The algo consulting team , which the co-heads of electronic trading agree has been key , forms part of the wider coverage team working closely with Goldman pieces of liquidity analysis between February and the end of June this year , delving into various aspects of the landscape such as spreads and top of book data . He adds that the team managed to get the analyses to clients swiftly as events were unfolding .
“ Gone are the days of having one sales trader as the only relationship for the institutional and hedge fund accounts ,” Harman explains . “ Now , it ’ s four or five key people across execution that can really be there for clients to give them essential resources and help them
“ From a top down point of view , principal liquidity is a big bet for us .”
DANIEL MALLINSON , MD , HEAD OF EMEA EXECUTION SERVICES , GOLDMAN SACHS unprecedented surge in execution costs . Estimates from GSET revealed that the cost of execution for clients rocketed fivefold in some cases during the most volatile periods .
“ I don ’ t think we have ever seen a fivefold increase in the costs of execution over such a short period ,” Mallinson says . “ Suddenly the traders , who are scrupulously measured by their own organisations , were having to justify that increase in cost .
“ Our liquidity access enabled us to actually be one of the cheapest providers . All of the content that the team provided also helped to explain why costs were going up weekby-week , and how Europe costs compared to the US and other markets . Switching from the objective to the subjective side of the business , I would say that our ability to handhold our clients through that period was of great importance .”
Sachs ’ institutional clients , who themselves , have expanded their quant and research teams .
As part of efforts to boost market insights for clients , in January 2019 Goldman Sachs hired 15-year Morgan Stanley veteran and former head of market structure , Ellie Beasley , to lead the new-look market structure team . Another high-profile hire has been industry veteran Michael Steliaros , previously the global head of quant trading at Bank of America , who has been working hard on developing the execution research team after joining Goldman Sachs in 2017 .
Providing market insights has been pivotal for the team during the crisis and particularly at the height of the volatility .
Mallinson says that GSET published more than 50 different execute efficiently . Along with their execution coverage , the market structure , index research , and execution analytics teams are all now essential relationships and services for our clients .”
With each of these newly-developed teams coming together , the focus on front-to-back services comes more clearly into focus . All of the teams that form GSET are coached on the fact that no two clients use the platform in the same way . Despite the emphasis on the front-office , combining all of the resources and teams to provide a more bespoke service to each client has been an important part of the new GSET strategy .
As GSET focused on providing timely access to market insights along with continued provision of liquidity at the height of the volatility , market participants experienced an
Execution evolution Upon outlining some of the execution trends , Harman says that GSET noted a shift in the way market participants were trading as the environment became increasingly volatile . There was , of course , an uptick in volumes as it became more difficult to trade and market participants became more urgent .
Long duration-type strategies began to decline , as more urgent liquidity seeking strategies increased . On an average day , the GSET platform trades around 35 % in short duration liquidity seeking strategies , and 45 % in long duration strategies . During the more volatile period , however , Harman says this was essentially flipped on its head .
Harman also notes interesting findings across the ELP SI landscape . He says GSET holds one of the largest market shares and connectivity to ELP SIs across the street .
38 // TheTRADE // Fall 2020